OFFICE OF RENT ADMINISTRATION
                                     GERTZ PLAZA
                               92-31 UNION HALL STREET
                               JAMAICA, NEW YORK 11433

          -------------------------------------X   ADMINISTRATIVE REVIEW
          APPEAL OF
                    GEORGE MALLOUK
                                                   RENT ADMINISTRATOR'S
                                                   DOCKET NO.:  BJ230177OM



          On October 17, 1989, the above named petitioner-owner timely filed 
          a petition for administrative review (PAR) against an order issued 
          on October 4, 1989, by a Rent Administrator (Gertz Plaza) 
          concerning the housing accommodations known as 74 Gatling Place, 
          Brooklyn, New York, various apartments, wherein the Rent 
          Administrator determined that the owner was entitled to a rent 
          increase based on the installation of a major capital improvement 

          The Commissioner has reviewed all of the evidence in the record and 
          has carefully considered that portion of the record relevant to the 
          issues raised by this administrative appeal.

          The owner commenced this proceeding on October 7, 1987, by 
          initially filing an application for a rent increase based on the 
          installation of new prime windows at a total cost of $67,536.50.

          The Rent Administrator granted the application in part by exempting 
          certain tenants from paying the rent increase herein since said 
          tenants were already paying a rent increase for recent window 
          installations (storm windows or prime windows).

          The petitioner challenged the Rent Administrator's exemption of 
          apartments 1B, 1E, 3A and 6D from the increase herein because said 
          apartments had storm windows replaced only and therefore, a partial 
          increase is requested for said apartments.  Apartment 1L was the 
          only apartment to have prime windows replaced prior to the MCI 
          herein (no new prime windows installed via the MCI herein), and 
          therefore, the owner is in agreement with the exemption status of 
          this apartment.

          One tenant objected to the owner's petition stating that the 
          current rent increase (storm windows) was sufficient.

          ADMIN. REVIEW DOCKET NO. DJ-230187-RO

          In reply to the tenant's response, the owner states that he has 
          complied with DHCR criteria concerning the rent increase herein; 
          and that only a partial increase is sought with respect to the 
          current MCI for certain exempted apartments.

          After considering that portion of record relevant to the issues 
          raised by this petition, the Commissioner is of the opinion that 
          this petition should be granted.

          Rent increases for major capital improvements are authorized by 
          Section 2202.4 of the Rent and Eviction Regulations for rent 
          controlled apartments and Section 2522.4 of the Rent Stabilization 
          Code for rent stabilized apartments.  Under rent control, an 
          increase is warranted where there has been since July 1, 1970, a 
          major capital improvement required for the operation, preservation, 
          or maintenance of the structure.  Under rent stabilization, the 
          improvement must generally be building-wide; depreciable under the 
          Internal Revenue Code, other than for ordinary repairs; required 
          for the operation, preservation, and maintenance of the structure; 
          and replace an item whose useful life has expired.

          In relevant part, Policy Statement 89-5 states that where the owner 
          received an MCI rent increase for storm windows and where those 
          windows were installed fewer than fifteen (15) years prior to the 
          new replacement windows, then the MCI increase granted will be 
          based on the cost of the new windows reduced by the original cost 
          of the storm windows.

          The evidence of record in the instant case indicates that 
          apartments 1B, 1E, 3A and 6D are paying rent increases for 
          previously installed storm windows which were less than fifteen 
          (15) years old when replaced.  Thus, in accordance with Policy 
          Statement 89-5, the owner is entitled to receive a rent increase 
          for said apartments which reflects deductions from the MCI increase 
          herein (new prime windows) in the amounts established via the 
          previous increase (storm windows) as presented by the owner in his 


          ADMIN. REVIEW DOCKET NO. DJ-230187-RO

          It is noted that all tenants were afforded the opportunity to 
          respond to the owner's PAR but only one (1) response was received 
          in reply thereto with no reference to any error in the owner's 
          calculations.  Thus, the adjusted MCI rent increases for said 
          apartments are as follows based upon a $6.15 per room, per month 

                                 INCREASE  PREVIOUS  COLLECTIBLE 
                                 HEREIN    INCREASE  INCREASE
          4                    1B$24.60    $8.00     $16.60
          4                    1E$24.60    $5.00     $19.60
          3                    3A$18.45    $9.00     $9.45
          3                    6D$18.45    $7.00     $11.45

          THEREFORE, in accordance with the Rent Stabilization Law and Code, 
          and the New York City Rent and Eviction Regulations, it is

          ORDERED, that this petition be, and the same hereby is, granted and 
          that the Administrator's order be, and the same hereby is, modified 
          to the extent of allowing an adjustment to the MCI rent increase 
          herein in accordance with this order and opinion; and that in all 
          other respects, the Rent Administrator's order remains in full 

                                                         Joseph A. D'Agosta
                                                        Deputy Commissioner



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